Enel looks to Vietnam in Asian green energy drive

Enel looks to Vietnam in Asian green energy drive

Italian utility Enel plans to expand its green energy capacity in the next
few years by entering two or three markets in Asia and Africa but is not
planning major acquisitions, its renewable energy chief said on Thursday.

Enel, which controls Spain'sEndesa, became Europe's biggest utility by
market value when it bought out its renewable energy division last year. The
state-controlled company is now focusing on power grids and green
businesses.

"(We) will pursue growth in areas where we're already present and open up a
few new markets like Vietnam and Senegal," Antonio Cammisecra, head of
global renewable energies at Enel Green Power (EGP), told Reuters.

The company sees South East Asia as a key growth area though China is off
the agenda for the time being, he said.

"We are, however, monitoring it constantly since it's too big to ignore,"
said Cammisecra, who took the helm at EGP earlier this year.

He said the green division wanted to expand in some of its more attractive
markets such as Australia, Zambia and India, where it could act as a
bridgehead for Enel to build power networks and sell electricity to retail
customers.

"We're looking at these countries holistically. EGP goes in and builds green
plants. Then the group sees if there's room to go downstream in areas like
distribution and retail," he said.

EGP, one of the world's biggest renewable energy companies, is in 29
countries. It plans to spend about 8 billion euros ($9 billion) by 2019 to
increase its installed capacity to almost 46 gigawatts from 37 gigawatts.

U.S. STILL ATTRACTIVE

Cammisecra said in the next year or so the company would see significant
growth in the United States and Mexico thanks to its "build, sell, operate"
strategy of constructing plants, selling them and then managing them for a
fee.

The United States remained a very big renewable energy market despite
President Donald Trump's decision to leave the Paris Climate deal, he said,
adding that increasing demand from commercial and industrial (C&I) users
would drive growth.

"Our plans and investments in the U.S. remain unchanged," he said.

EGP is increasingly selling power directly to end users rather than
utilities and over the next three years will sell half its output to C&I
clients, Cammisecra said.

There has been growing concern that margins for renewable energy companies
could suffer as utilities vie to lock in low prices through power purchase
agreements.

Cammisecra said while major, transformative acquisitions were off the agenda
for EGP, it was ready to pursue smaller deals to help boost growth.

"In Spain, greenfield operations are our preferred route but we will also
consider acquisitions," he said.

Cammisecra declined to comment when asked if EGP was interested in Spanish
green energy company Renovalia, which investment fund Cerberus bought in
2015 for 1 billion euros and is said to be up for sale.

He said EGP, through its solar joint venture with Italian infrastructure
fund F2i, would look at the Italian photovoltaic assets of Terra Firma when
they come to market.

"We are interested and will have a look but the process hasn't started yet,"
he said.

Terra Firma has hired UniCredit, JPMorgan and Jefferies to sell its RTR
portfolio of solar power plants in Italy, many in the south. A banker with
knowledge of the matter said it could be worth around 1.5 billion euros.

The move by some major oil companies to diversify their businesses by moving
into the renewable energy sector has concerned some industry watchers who
are worried the existing green energy players could suffer.

But Cammisecra brushed aside the concerns arguing that renewable energy
companies with strong track records, low costs and effective strategies
would win.

"Oil and gas players hardly have the cheapest costs of capital. I don't
think it's a major threat," he said.

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Link to Original Article:
http://www.nasdaq.com/article/interviewenel-looks-to-vietnam-in-asian-green-
energy-drive-20170629-00738

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com